Apple and the Great Chinese Take-Away

Last year Apple earned over $400,000 in profit per employee – more than Goldman Sachs, Exxon Mobil or Google. Apple has 43,000 employees in the US and 20,000 overseas; however, their contractors' employees number around 700,000 engineers, assemblers, etc., in Asia, Europe and elsewhere (http://tinyurl.com/7l676hc).

Why China? Why not the US?

When Steve Jobs demanded new scratch-free screens for the new iPhone at short notice a Chinese company tendering for the contract constructed and prepared premises including on-site dormitories and a warehouse filled with glass samples with engineers on hand. Just in case they got the contract. They got it. And when the screens were ready and in transit to the Foxconn assembly line 8,000 workers were woken up around midnight, given tea and a biscuit and began a 12 hour shift, producing over 10,000 iPhones a day. According to one executive, 'no American plant can match that.' Apple had estimated that around 8,700 industrial engineers would be needed to 'oversee and guide' a 200,000 strong assembly line of workers who would be employed in manufacturing iPhones. Company analysts had forecast it would take up to nine months to find that many qualified engineers in the US. In China it took 15 days.

In 1983 the Apple Mac was 'made in America'; by 2004 Apple products were in large part manufactured and assembled abroad. Currently the software and Apple's 'innovative marketing campaigns' are created in the US by 100 full-time employees and the semiconductors are made in Texas by 2,400 employees of South Korea's Samsung.

Manufacturing the iPhones in the US would increase the price of each phone by about $65 whilst the profit is often hundreds of dollars per phone. The main factor for having moved the vast majority of jobs to China is not the cost of wages but more to do with 'inventory costs, supply chains and the time involved in scaling production up and down', plus it's still easier to bypass labour regulations and to hire and fire in China than in the US.

It is for reasons like these that so many 'middle-wage' jobs have disappeared in the last two decades from the US. Any new jobs that are created there are mostly in the service industry – restaurants, call-centres, hospitals and temporary work, with little upward mobility opportunities. Apple's own high-tech plant in California became an Apple Care call centre with jobs at $12 per hour.

Martin Hart-Landsberg (http://tinyurl.com/76a76cs) points out that the manufactured goods of China's top exporters, though recorded as Chinese products, include around 60% of all items and 85% of the high-tech items produced by foreign companies operating in China. He also cites figures from the US Bureau of Labor Statistics showing manufacturing employment in China falling between 1994 and 2006 from 120.6 million to 111.61 million and, in particular, urban manufacturing (mostly foreign) falling from 54.92 million to 33.52 million. Significantly of total urban employment most growth was in the casual wage or self-employment area – 80 million of 81.7 million 'informal' workers.

The Chinese Take-Away

Of the thousands of jobs that have been created from developments in US solar and wind energy, and semiconductor fields within the last decade, much of the actual employment has been abroad. US facilities have been closed to reemerge in China where executives say they are competing with Apple for shareholders. They are obliged to rival Apple's growth and profits to survive. Capitalism and its shareholders have no regard for workers wherever they are; their loyalty is to the god of profit only.